Disability insurance series, Pt. 2: Owner occupation and riders

By Steve Savant

Owner occupation and riders: A tribute to Disability Insurance Month in May with special guest Marcy Pruitt, nationally recognized disability insurance expert, educator and workshop trainer.

Occupation categories and definitions: "Any occupation” is generally defined as blue collar workers suited by education experience or training with coverage for two years, sometimes up to five years. “Modified owner occupation” covers the general white collar population unable to perform the important duties of your job and not gainfully employed nor required you to seek employment.

Transitional owner occupation offsets when post disability income benefits and earned income equal 100 percent of the original specialty income. Specialty owner occupation is specialization skill sets and highly defined performance expectations like a surgeon who can’t perform surgery because of a disability, but could have a general practitioners’ practice or teach medicine.

Workman’s compensation may offset disability benefits.

Guaranteed renewable policies renew each year but the carriers could raise rates during the coverage period. However, the rates have been reasonably stable. These types of policies may be up to 25 percent less than non-cancelable policies, which guarantee the renewability and the rate for the coverage period.

DI residual is a rider providing a proportional amount of the benefit as you return part time to work. A cost of living rider is an economic call. The longer the timeline to retirement, the more valuable the cost of living rider. A catastrophic rider pays an additional benefit on top of the monthly benefit. The purchase option rider protects your future ability to purchase additional disability coverage.